Ann Taylor is sorry.
She was wrong. She misses you and wants you back.
And, if Ann Taylor were a real person, she would tell you thisherself.
Since she isn't, Kim Roy, company president, has to do it. Whichis why she mailed out 750,000 apologies last week.
Ann Taylor is, of course, a store. But for many years, it was muchmore than that. Through the power-suited 1980s and 1990s, it was alandmark on the career path of young, professional women. If you hada big interview or got a big promotion or were invited to a bigmeeting, you went straight to Ann Taylor for a new silk suit in navyblue. Or, if you were creative, black.
So, when Ann Taylor started filling its stores with tight, trendyclothes in shades of pink and lavender last year, it was a big deal.Big enough to warrant Roy's personal message. Her letters, sent outto customers who had been on the company's mailing list for more thana year, were the most public step Roy has taken since taking the topspot in May.
"We've been listening to you, and what you've told us has inspireda rediscovery of the Ann Taylor style," the letter read. "... Youwill notice the results this fall--in style, quality and comfort thatis much closer to both our expectations."
So it might be hard to believe that Ann Taylor's sales have beensteadily climbing and that last year's figures were up 12 percentfrom 1999. Why is the company so eager to revisit a strategy thatimproved its overall numbers?
The answer is Jen Addison. A 27-year-old lawyer who lives inLincoln Park, Addison is what Ann Taylor executives would call a coreclient. She wears suits to work every day. Her business wardrobe isutterly immune to trends.
The Ann Taylor core client is exceptionally loyal; she spendsnearly half of her total apparel dollars there. But not last year.
"Probably most of my suits in the beginning [of my career] werefrom Ann Taylor," Addison said. "But I didn't buy any suits therelast year. For one thing, they didn't have many suits last year. Andthen the ones they had were odd. Some of them had capri pants andthings that were not appropriate for me to wear to court."
"I didn't buy anything here last fall," said Ilene Bomsen, acorporate marketing manager visiting from New York, as she left theAnn Taylor store in Chicago Place on Michigan Avenue on Thursdayafternoon. Bomsen, another core client, explained that the offeringswere "less conservative" than what she wanted.
The company was well-aware of complaints such as those. WallStreet, too, was quick to take note. The company's stock was tradingat more than $40 a share last September, but by December, its valuehad fallen to $18. It climbed again in May, just as CEO J. PatrickSpainhour named Roy president of the Ann Taylor stores division, andis now trading at around $35 a share.
In his letter to shareholders in the company's annual report for2000, Spainhour bluntly acknowledged last year's problems.
"...[W]e made a misstep in fall and offered a holiday collectionthat did not clearly focus on the needs of our core client," hewrote. "We overemphasized contemporary, fashion-forward styling. Mostsignificantly, we interpreted the fashion look of the season withslimmer silhouettes in many of our designs, which our client foundless flattering."
This isn't to say that Ann Taylor doesn't want to sell clothes toskinny, contemporary, fashion-forward women. Actually, the company isseeking the best of both worlds, selling less-expensive and trendieritems at its Ann Taylor Loft stores and, this season, once againoffering more classic items at its flagship Ann Taylor stores. Theidea is that core clients will shop at Ann Taylor, while trend-seekers, perhaps more profitable but definitely less reliable, willfrequent the Loft.
It remains to be seen how well the two-pronged strategy will work.This year, total sales are up 1.3 percent, but store sales in the AnnTaylor (non-Loft) division are down 17.2 percent. Classic clothesdon't typically sell well when the economy is slow, since consumerscan simply recycle pieces they already have. Some core clients, suchas Addison, who started buying more work clothes at Marshall Field'slast year, might not be inclined to return to Ann Taylor. Meanwhile,the profitable Loft division is counting on a notoriously ficklecustomer base that might soon move on to another, hotter venue.
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